Jobs forecast lifts hopes of new year cuts in interest rates

The labour market revealed its resilience to inflationary pressures and the credit squeeze yesterday as unemployment fell on one measure to its lowest rate for 32 years.

Jobs data from the Office for National Statistics painted an encouraging picture of both employment and earnings growth, which analysts said would give the Bank of England scope to cut interest rates further next year. The number of people claiming unemployment benefits fell by 11,100 in November to 813,000. At 2.5 per cent of the workforce, that represented the lowest joblessness since June 1975.

Unemployment also fell on the broader survey-based measure, to 5.3 per cent in October from 5.2 per cent three months before, while the employment rate edged up by a similar degree. Fears that a…